What is full coverage car insurance?

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If you are shopping for car insurance, you may have heard the term “full coverage” as a recommended or required form of coverage. Although car insurance companies may have some differences when it comes to what is included, full coverage insurance typically means that your auto insurance policy includes coverage for damage to your own vehicle as well as coverage for the damages and injuries that you cause to others.

By adding these coverages, known as comprehensive and collision, you create a full coverage car insurance policy. In the United States, full coverage costs an average of $1,674 per year. While full coverage auto insurance is not required by law in any states, financial institutions typically require proof of full coverage if you have a loan or lease on your vehicle.

What is full coverage insurance?

Most states require you to purchase at least minimum levels of liability coverage, and some also require you to carry additional coverages like personal injury protection (PIP) or uninsured motorist coverage. A basic full coverage auto insurance policy includes the coverages needed to protect your finances from the expense of repairing or replacing your vehicle. State minimum liability limits do not serve this purpose.

  • Bodily injury liability: When you are at fault for an accident and the driver or passengers in the other vehicle sustain injuries, your bodily injury liability coverage could help pay their medical expenses.
  • Property damage liability: If you cause an auto accident, your property damage liability coverage is designed to help pay to repair or replace the driver’s vehicle. Damage that you cause to other property — like road signs, fences or buildings — is also typically covered.
  • Collision: If you collide with something like another vehicle, a tree or a pole, your collision coverage will help pay to repair or replace your vehicle.
  • Comprehensive: Often called “other-than-collision,” this section of your policy covers damage to your vehicle caused by a wide array of situations, including theft, vandalism, storm damage and animal damage.

These are the basic coverages included in a full coverage auto policy. However, many companies also consider some optional coverages to be a part of a full coverage policy. These include:

  • Uninsured motorist: If you are hit by a driver who does not have insurance, this option could help pay for your injuries and the injuries of a passenger. Depending on the state you live in, you might also be able to add uninsured motorist property damage, which will cover damage to your car caused by uninsured motorists. Some states require uninsured motorist coverage.
  • Underinsured motorist: This coverage is designed to pay the excess amount for your injuries and injuries to your passengers if the at-fault driver does not have enough coverage to pay for the full amount. Your state might require this coverage.
  • Medical payments or personal injury protection (PIP): In some states, you will be required to purchase medical payments or PIP by law. In others, one or both of these coverages may be available as an option. Both help to pay for your medical bills and those of your passengers if you are injured in an auto accident, regardless of who is at fault. PIP also helps pay for lost wages and the cost of certain household services if you are unable to perform them.
  • Roadside assistance: This optional coverage is often considered part of a full coverage package. It provides coverage for towing, lockout services, tire changes and other situations that could strand you on the side of the road.
  • Car rental reimbursement: If your vehicle is not driveable due to a covered loss, this optional coverage could help to pay for the cost of a rental vehicle.

Although these coverages could be optional, depending on where you live, some companies will automatically include one or more on a full coverage car insurance policy.

How much does full coverage insurance cost?

The average cost of a full coverage auto policy in the United States costs $1,674 per year. Because of the additional protections that full coverage adds, it is typically more expensive than minimum coverage car insurance. However, full coverage provides a greater degree of protection to your finances because it covers damage to both the other party and to your own vehicle. This means that, although your premium might be more expensive, your financial health is better protected with full coverage.

If you are looking for cheap full coverage insurance, there are several factors that you should be aware of. The company you choose, the state you live in, your driving history, the type of vehicle you drive and the coverage limits and deductibles you choose will all impact how much you pay.

Average cost by insurance company

Car insurance companies evaluate a number of personalized factors to determine how much you will pay for car insurance. These include your driving history and the type of vehicle you drive. Not surprisingly, rates for full coverage car insurance are more than those for minimum coverage car insurance, but the price for full coverage varies greatly between companies. This is why getting quotes from multiple car insurance carriers is one of the best ways to make sure you are paying a competitive price. Rates below reflect quoted annual premiums from Quadrant Information Services.

Company Full coverage annual premium Minimum coverage annual premium Difference
Allstate $1,921 $696 $1,225
American Family $1,911 $918 $993
Amica $1,378 $405 $973
Auto-Owners $1,351 $382 $969
Erie $1,233 $409 $824
Farmers $2,000 $808 $1,192
Geico $1,405 $433 $972
MetLife $2,123 $821 $1,302
Nationwide $1,485 $501 $984
Progressive $1,509 $582 $927
State Farm $1,457 $539 $918
USAA $1,225 $384 $841

Average insurance cost by state

Auto insurance rates vary drastically from state to state, with nearly half the states and Washington, D.C. falling above the national average for full coverage car insurance.

Company Full coverage annual premium Minimum coverage annual premium Difference
Alabama $1,623 $469 $1,154
Alaska $1,559 $373 $1,186
Arizona $1,547 $555 $992
Arkansas $1,914 $470 $1,444
California $2,065 $733 $1,332
Colorado $2,016 $518 $1,498
Connecticut $1,845 $794 $1,051
Delaware $1,775 $787 $988
Florida $2,364 $1,101 $1,263
Georgia $1,982 $756 $1,226
Hawaii $1,127 $345 $782
Idaho $1,045 $307 $738
Illinois $1,485 $442 $1,043
Indiana $1,254 $367 $887
Iowa $1,260 $252 $1,008
Kansas $1,698 $410 $1,288
Kentucky $2,128 $748 $1,380
Louisiana $2,724 $975 $1,749
Maine $965 $294 $671
Maryland $1,877 $767 $1,110
Massachusetts $1,223 $510 $713
Michigan $2,309 $948 $1,361
Minnesota $1,643 $537 $1,106
Mississippi $1,782 $492 $1,290
Missouri $1,661 $468 $1,193
Montana $1,737 $342 $1,395
Nebraska $1,531 $335 $1,196
Nevada $2,246 $860 $1,386
New Hampshire $1,275 $389 $886
New Jersey $1,757 $847 $910
New Mexico $1,419 $385 $1,034
New York $2,321 $1,062 $1,259
North Carolina $1,325 $413 $912
North Dakota $1,264 $285 $979
Ohio $1,034 $328 $706
Oklahoma $1,873 $423 $1,450
Oregon $1,346 $610 $736
Pennsylvania $1,476 $427 $1,049
Rhode Island $2,018 $749 $1,269
South Carolina $1,512 $558 $954
South Dakota $1,642 $275 $1,367
Tennessee $1,338 $371 $967
Texas $1,823 $524 $1,299
Utah $1,306 $528 $778
Vermont $1,207 $292 $915
Virginia $1,304 $441 $863
Washington $1,176 $463 $713
Washington, D.C. $1,855 $704 $1,151
West Virginia $1,499 $458 $1,041
Wisconsin $1,186 $332 $854
Wyoming $1,495 $271 $1,224

Is full coverage insurance worth it?

Everyone’s financial situation is different, but in many cases, full coverage car insurance is worth it. Full coverage is generally recommended if your vehicle is new or relatively expensive, if you do not have the finances to repair or replace your damaged or totaled vehicle or if the likelihood of damage is higher than average, as it could be with a teen driver.

And if you have a loan or lease, you will very likely be required to have full coverage. Financial institutions require full coverage because when you have a loan or a lease on your vehicle, you do not fully own it — a bank or other financial institution owns at least part of the car (as you pay down a loan, you own more of the car and your lender owns less). Because of this, lenders require full coverage to ensure that you will be able to pay off the balance of your lien if the vehicle is totaled.

Frequently asked questions

Is full coverage insurance required for all cars?

No. Most states require drivers to carry at least minimum levels of liability coverage, and some states also require additional coverages, like PIP or uninsured motorist coverage. Full coverage is only required if you have a loan or lease on your vehicle. However, even if you own your car outright, full coverage could still be a good idea to better protect your finances.

Is full coverage or liability-only coverage better?

That depends on your financial situation, your tolerance for risk and the requirements of your lender. Liability-only coverage can be a good option if your vehicle is paid off and you have the finances to repair or replace it if it is damaged or totaled. Full coverage adds more coverage to better protect you from a wider variety of situations, including damage to your own car. The optional coverages that might be included in full coverage — like car rental reimbursement and roadside assistance — provide even more protection. Talking to a licensed agent about your situation could help you choose coverages that are right for you.

How long should I keep full coverage on my car?

This is a matter of personal preference. You will be required to keep full coverage on your vehicle until you have paid off your loan (or until you buy out your lease, if you decide to), but once you own your vehicle outright, you have the option of removing comprehensive and collision coverages. Some financial professionals recommend that when the annual cost of comprehensive and collision coverages equal more than 10% of your vehicle’s value, it is time to switch to liability only. However, if you still do not have the savings to repair vehicle damages or to buy a new car if yours is totaled, you might want to keep full coverage.

Methodology

Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:

  • $100,000 bodily injury liability per person
  • $300,000 bodily injury liability per accident
  • $50,000 property damage liability per accident
  • $100,000 uninsured motorist bodily injury per person
  • $300,000 uninsured motorist bodily injury per accident
  • $500 collision deductible
  • $500 comprehensive deductible

To determine minimum coverage limits, Bankrate used minimum coverages that meet each state’s requirements. Our base profile drivers own a 2019 Toyota Camry, commute five days a week and drive 12,000 miles annually.

These are sample rates and should only be used for comparative purposes.